Insurers have urged the Government to retain Nest’s restrictions to ensure the pension scheme remains focused on helping people on low incomes.
The Government-backed scheme is currently constrained by a ban on transfers in or out and a £4,200 contribution cap. The restrictions are due to be reviewed in 2017.
However, a report by the work and pensions select committee today calls for the restrictions to be lifted “as a matter of urgency” to make Nest more attractive employers.
Committee member and Conservative MP Brandon Lewis says the Government should review the restrictions in 2013, when the scheme has been operational for a year.
Recently-appointed ABI director of life, savings and protection Steve Gay (pictured) says: “Changing the purpose of Nest before it has even begun the job would be a mistake.
“Nest was designed – with the full support of the pensions industry – to help those on low incomes.
“With auto-enrolment beginning this year, it should focus on doing that, rather than competing for higher paid customers who already have plenty of choice.”